America: From Colony to Superpower. Part III: 1929-1960

In one week the nation, which had lost confidence in everything and everybody, has regained confidence in the government and in itself

Walter Lippmann on the impact of the new Democratic government, 19321

The question of how to recover from the 1929 crash consumed all American politicians. The financial community believed that the United States must maintain the gold standard and President Hoover promised to do so. He advocated federal intervention to help the banks and industry but little intervention at local level. The situation was terrible with millions unemployed, families starving and crime increasing rapidly. In the summer of 1932 the Republicans re-nominated Hoover and Vice President Charles Curtis. The Democrats went for Franklin D. Roosevelt, governor of New York.

Roosevelt was a distant relation of Theodore Roosevelt. In 1921 Roosevelt was sick with poliomyelitis which deprived him of the use of his legs. However, he did not let this end his public career and later became governor of New York. He had the support of both the northern and southern wings of the Democratic party, and so had closed the gap dividing the party since 1924. Roosevelt began to define the New Deal during his campaign, setting forth a campaign of recovery for the economy. He promised assistance to victims of the depression and stricter public regulation of the utilities and federal development of public power. But he made sure to be vague enough in speeches so as not to alienate any large grouping. Roosevelt's charm and debating skill contrasted with President Hoover's cumbersome speech and pessimistic outlook. The president emphasised his dedication to budget-balancing and the gold standard, defended his record, and charged his opponent with recklessness. The public thought otherwise and Roosevelt was swept into office. Radicalism was dismissed (the Socialists polled 881,951 votes, the Communists, only 102,785). Roosevelt won over 57 percent of the popular vote and carried the Electoral College 472 to 59. The Democrats also gained a large majority in both houses of Congress. The vote, a protest against the administration, gave Roosevelt a clear mandate for change, though the nature of that change was clear neither to the voters nor the victor. Roosevelt lost only six states, all in the Northeast. He carried the agricultural West as well as the South.

The New Deal

We also relied on the principle… that many men with a little each is a far better market than one man with much, and all the rest with nothing

The Blue Eagle from Egg to Earth by Hugh Johnson, 1935, discussing the rationale behind the New Deal2

Roosevelt was influenced by the Progressives and by former presidents Theodore Roosevelt and Wilson. He believed government should interfere to improve general social conditions. But he had no iron cast theories and was prepared to weigh up different options. The Agricultural Adjustment Act in 1933 established the Agricultural Adjustment Administration (AAA) to increase farm income by controlling production. Farmers were offered benefit payments if they agreed to regulate their plantings according to a national plan. As production declined accordingly, prices rose. The National Recovery Administration (NRA) was set up under the National Industrial Recovery Act to restore employment and regenerate industry. On April 18th, 1933, the president officially abandoned the gold standard. In total, fifteen major bills were passed through Congress for enactment during these Hundred Days at the start of Roosevelt's presidency.

This flurry of activity resulted in great public confidence with the president, and the Democrats tightened its control of Congress in the 1934 elections. The Republicans were left with governorship of only seven states. But all was not well. By 1935 the economy was still lagging, and Roosevelt had encountered a powerful political enemy- the Supreme Court. It barely supported the constitutionality of his gold standard abandonment. Then, in a series of cases, it ruled against various aspects of his public planning legislation. In particular, it held the National Industry Recovery Act to be unconstitutional, stating it handed excessive power to the executive. Despite the judiciary's rejection of much of the New Deal, a revolution in constitutional law was taking place. Thereafter the government could legally regulate the economy.

Roosevelt began to shift away from national planning to more social provisions. Congress established the Works Progress Administration (WPA) which gave relief work to the unemployed. The Wagner Labour Relations Act of 1935 outlawed unfair work practices and established the National Labour Relations Board to enforce its provisions. The Resettlement Administration (RA) was set up to rehabilitate small farmers and tenants, whom had not benefited from the AAA. In August 1935 Congress passed the Social Security Act, setting up the Social Security Board to operate both a national plan of contributory old-age and survivors insurance and a federal-state plan of unemployment compensation. This started the government on the road to a proper social welfare system. The New Deal was proving good for the poorer sections of society, as well as for organised labour.

The Republicans nominated Governor Alfred M. Landon of Kansas for the 1936 presidential election. Landon had been a former Progressive, who while conservative with regard to public finance, was tolerant of much of the New Deal. His running mate was a newspaper publisher from Chicago, Frank Knox. The Democrats re-nominated Roosevelt and Vice President Garner. Landon began to attack more and more of the New Deal as the campaign unfolded, saying that only the Republicans could achieve such moves constitutionally. But the public firmly supported Roosevelt, and he won every state except Maine and Vermont. Turnout increased substantially in 1936, with Roosevelt receiving overwhelming support from first-time voters. In 1936 Roosevelt's celebrated 'coalition' demonstrated its full strength. The city machines and workers rallied to him. Increasing numbers of black voters in northern cities voted Democrat as did much of the middle class, previously Republican voters.

In February 1937 Roosevelt sent a message to Congress calling for the reorganisation of the federal judiciary. This shocked many who disliked the idea of 'packing' the court to get New Deal legislation through. In any event the Supreme Court began to accept the constitutionality of such legislation. But the incident resulted in the New Deal losing momentum in Congress, as Democratic conservatives and reformers split. Following the defection of southern Democrats, the Republicans made gains in the 1938 elections. 1938 saw the end of the forward momentum of the New Deal. Public support for reform was decreasing, and Congress was now controlled by a conservative coalition. In any event, international events saw the nation turn its attention elsewhere.

The Surge towards War

When peace has been broken anywhere, the peace of all countries everywhere is in danger

President Roosevelt, speaking after Germany's invasion of Poland, September 19393

President Roosevelt had maintained the policy of isolationism when he took office in 1933. He also formulated the policy of the 'good neighbour', which involved respecting and not interfering with other nations. In various Latin American countries and in his dealings with Mexico in particular Roosevelt followed this policy, which by 1940 succeeded in inspiring confidence throughout the region in the reality of American friendship. The Monroe Doctrine was transformed from a unilateral American manifesto into arrangements for mutual action against an enemy4. But elsewhere things were more difficult. Various disarmament conferences in the early 1930s failed to broker any agreements. America maintained its policy of neutrality, refusing to form any alliances in the face of increasing German and Japanese power.